ROIC ROCE

[analystdude]

ROIC = NOPLAT/?

ROCE = EBIT/?

Correct denominators please

Forgive me but I cannot find a clear answer in the text.

EDIT: is Invested Capital supposed to be = Net Operating Assets?

[jounin83]

ROIC = NOPLAT / IC

ROCE = EBIT / (D+E)

If anyone find the question related with these 2, kindly post in here.

Topic tests / EOC is preferable more than schweser questions.

Thanks

[AmruthSundarkumar]

Roic= noplat/ic where ic= fixed assets+ current assets- current liabilities-cash Rice=ebit/(d+e)

[analystdude]

Thank you. I see conflicting answers depending on the source.

I assume MVdebt + MVequity for ROCE?

[JeffO15]

Is ROCE the same as MVIC?

[abeshak_sindhi]

@JeffO15

Is ROCE the same as MVIC?

I dont think so.MVIC is closely related to Enterprise vaue. MVIC=MV of debt+MV of equity+prefered capital+cash and other financial assets.

[krokodilizm]

ROCE=Return on capital employed=%

MVIC=Market value of invested capital=$

One is a ratio, the other is an absolute value. So they are different things.

[n_jaya]

While calculating ROCE, which year’s capital employed to be used.?

1. Current year’s capital employed? (or)

2. Last year’s capital employed? (or)

3. Average of last year’s and current year’s capital employed?

can anyone please clarify?

[simpleanalyst]

@n_jaya

calculating ROCE, which year’s capital employed to be used.?

1. Current year’s capital employed? (or)
2. Last year’s capital employed? (or)
3. Average of last year’s and current year’s capital employed?

can anyone please clarify?

I’ve been searching for this, here’s my understanding:
ROIC: EBIT(1-t) / NOA
ROCE: EBIT / D+E

Numerators are clear. Here’s what I have for denominators:
The NOA should = (Assets - cash) - (Liabilities - debt)
D + E = Debt and equity book values on the B/S